![]() It’s a revamped and highly specialized version of the NEEQ. The Beijing Stock Exchange isn’t an entirely new initiative. Beijing Stock Exchange IPO hopefuls won’t need to clear profit and revenue thresholds to list, and will instead be allowed to meet less stringent financial requirements, like staying above a minimum market capitalization of roughly $31 million. The Beijing bourse is a key part of the government’s continued effort to develop China’s capital markets, one that will make listings easier for SMEs, says Wu.Ĭhina has already launched two exchanges that cater to smaller, early-stage firms-Shanghai’s STAR Market and Shenzhen’s ChiNext-but the BSE will ferry firms to the capital markets faster than its predecessors, says Bruce Pang, head of macro and strategy research at China Renaissance Securities. ![]() Banks “tend to focus their lending on larger state-owned enterprises and corporates,” says Michael Wu, senior equity analyst at Morningstar. Still, small mainland firms have typically faced challenges in capital raising. The BSE will allow only companies that have been on the NEEQ’s “select tier” for 12 consecutive months, alongside other financial requirements, to list. The BSE likely won’t generate a “material amount of additional fundraising… attract the same sort of investors who currently day trade on small Shenzhen names,” says Gatley.Īt least 200 NEEQ-listed firms are now preparing to apply for the exchange’s highest tier (known as the “select tier,” in which a company has to meet certain profitability and innovation requirements)-which is the first step in qualifying to list in Beijing. ![]() The new board may “cannibalize” listings from the NEEQ and Shenzhen’s ChiNext with those firms likely to list in Beijing the same ones that “would’ve listed elsewhere in the absence of the BSE,” he says. Over 4 million investors have now signed up to trade on the BSE.Ĭhina doesn’t need a new exchange, even if the BSE improves on some of the NEEQ’s weaknesses, argues Thomas Gatley, China corporate analyst at Beijing-based research firm Gavekal. Fifty-nine of the 71 recorded losses on Monday. The other 71 firms that shifted their listings to the BSE didn’t fare as well some, like battery maker Huizhou Huiderui Lithium Battery Technology, saw their shares jump 17%, while others recorded double-digit price declines. ![]() Henan Tongxin Transmission, an automobile transmission maker, surged the most-recording a 504% increase in morning trade, Reuters reports, citing Orient Securities data. The 10 newly public firms all gained in their first day of trading and notched the largest price jumps. Ten firms, like tech upstart Keda Automation Control-a Shanxi-based company that manufactures mining robots and other equipment-made their first-ever public debuts on Monday, while the other 71 firms transferred their listings from the National Equities Exchange and Quotations (NEEQ), China’s over-the-counter (OTC) exchange, to the BSE. Two months ago, Chinese President Xi Jinping announced the country’s new bourse as the “primary platform” that will serve “innovation-oriented SMEs” by offering them a new, accessible fundraising pathway.Ĭhina’s economic planners view SMEs as the backbone of the economy since small firms employ the majority of the country’s population and are integral players in China’s tech sector.Įighty-one companies began trading on the Beijing bourse Monday, primarily from the high-end manufacturing and software sectors.
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